If you recall our October 19 letter, "A Republican Grand Slam?" we argued "there is really nothing the Democrats can do to avoid major congressional losses," and cited Bob Novak's political report, which was uncanny in its accuracy: "If the election were held today: 1) Eight Republican Senate pick-ups. 2) The possibility of a Republican takeover of the House is growing, with important insiders in both parties calling it
more, not less, likely that the House rather than the Senate will change sides. 3) Most startling, the Republican candidates in the eight most populous states are leading in the race for governor." It should also be noted that of the media political experts, NBC's John McLaughlin may have been the first, in early September, to see a GOP takeover of the House, when the other members of his "Group" put the odds at 20-to-1. Watching the results roll in last night, I thought I should credit these seers, and so I have. This morning, I had some new thoughts about the importance of the Grand Slam that occurred to me more or less in this order:

* GOP control of Congress will mean a sweeping out of the Congressional Budget Office, presenting a grand opportunity to change the scoring methods that for several years have strangled supply-side tax changes in the cradle. This will be necessary if we are to get a
meaningful cut in the capital gains tax next year. There will, though, be arguments from austerity Republicans to leave the present scoring system in place.

* J.C. Watts won his congressional race in Oklahoma. Watts will be the first black
Kemp Republican in Congress, a former football star who can't wait to get to Washington to sell the Congressional Black Caucus on a cut in the capital gains tax! The passive Rep. Gary Franks of Connecticut was re-elected, but Watts is a dynamo who will make important conversions, a bridge to the 40 black Democrats who now see their power base crumbling.

* Newt Gingrich will be Speaker, but the most important Republican will be Rep. Dick Armey of Texas, the new Majority Leader. Gingrich's position at the top of the pyramid forces him to be less partisan. Armey, who would love to sweep out the CBO, will be the man of action, the most positive force for Reaganesque economic growth in the entire Congress.

* Bob Dole will be Senate Majority Leader. He starts at the top of the GOP power pyramid in Congress, a notch above Speaker Gingrich. Will he soon be overshadowed by Gingrich? He will have to use all his resources to stay on top. At the moment, Gingrich has a much clearer understanding of what yesterday's revolution was all about. This suggests he will overtake Dole, unless the 71-year-old Kansan can find some revolutionary zeal within himself that he hasn't as yet displayed. If Dole can't reenergize himself, he will know himself that he should stay in the Senate and leave '96 to the firebrands.

* Sen. Phil Gramm of Texas, a notch below Dole in the GOP power pyramid and the vocal leader of its austerity wing, will push Dole in that direction, which would mean problems with any kind of growth agenda if the focus becomes budget balancing. Gramm was most impressive this year on
defense, blocking the liberal agenda, but has yet to demonstrate a capacity for leadership on offense. How he handles himself now will determine his presidential potential. A year ago, he was among those Republicans who argued against doing anything positive on tax reform until the White House is recaptured -- lest Clinton take credit. He is now at least making a claim to a seat on the Finance Committee, pledging to use that platform to win a cut in the capital gains tax.

* Rep. Bill Archer of Texas will be chairman of the House Ways & Means Committee. The book on him is that he is a budget-balancer, wary of supply-siders. If so, he would dig in his heels against either a cut in the capital gains tax or indexing capgains
retroactively. The White House will try to squeak by with prospective indexing of capgains, the position already being pushed by Alice Rivlin at OMB. The upside on Archer: He really likes Dick Armey and feels warm and fuzzy about the Armey flat tax.

* Fed Chairman Alan Greenspan woke up this morning and realized he has a new political framework in which he must operate. It is now a Republican world. Not only do the banking committee chairmen change in House and Senate -- to Rep. Jim Leach of Iowa from Henry Gonzalez of Texas, and Sen. Al D'Amato of New York from Paul Sarbanes of Maryland. The political chemistry now also favors the GOP Congress over the Democratic administration in terms of its influence over Fed policy. What does this mean for interest rates? It can only be good, although perhaps not in time to stop another rate hike next week. Still on the treadmill today, the Fed added another $7.5 billion to the banking system this morning.

* Jack Kemp is back in action. His intervention against California's Prop 187 on illegal immigration regenerated enthusiasm for him among his old fans, who had begun to think he could no longer throw the long ball. The fact that 187 passed by a wide margin -- which Kemp expected when he came out against it -- is beside the point Kemp made, which actually helped Gov. Pete Wilson by forcing him to recast his support for 187 in a positive framework, stripping from it the racial overtones that triggered Kemp's opposition. The thought nags at me that Dole and Kemp would make the perfect ticket in '96, a congruent match of strengths and weaknesses.

* Two Senate seats were kicked away by the GOP inability to trump the race card. In Virginia, where Ollie North lost narrowly to Chuck Robb, and in New Jersey, where Chuck Haytaian lost a close one to Frank Lautenberg, the GOP campaigns did absolutely nothing to offset racist innuendos leveled against them. North was winning in Virginia even when labeled a "liar," but in the last two weeks, the Democrats pushed the idea that he is also a "bigot" based on false accusations that he supported KKKer David Duke. In New Jersey, Lautenberg was outrageous in playing the race card, inferring in his TV ads that Haytaian was a racist in refusing to denounce Bob Grant, a loudmouth radio talk-show host. Neither the North nor the Haytaian campaigns made any
public noises in their ad campaigns to counter the assertions -- leaving the impression among blacks that they were not unhappy with the situation. Neither got more than a tiny fraction of the black vote. The Murphy-Pentach firm, media advisor to both GOP campaigns, resisted any suggestions that there be direct appeals for the support of the African-American community in their paid advertising.

* In the major media, the biggest winner yesterday was The Wall Street Journal editorial page and Editor Bob Bartley, who kept the revolution in focus. The biggest loser was the
Journal's Washington Bureau and its bureau chief, Alan Murray. Murray's team produced the incredible front-page hatchet job on Newt Gingrich this morning, dredging up tired dopey accounts of how Gingrich divorced his first wife because she wasn't pretty enough to be First Lady. Murray's team also produced the latest hatchet job on Justice Clarence Thomas, to the everlasting shame of the
Journal's news editors in New York, who ran it in a prominent place. On WCBS radio this morning, Murray was predicting that Gingrich's "Contract With America" would cause the budget deficit to rise so fast that it would cause a big sell-off in the bond market, and stocks too. Murray is the protege of former
WSJ bureau chief Albert Hunt, who remains an important voice among the Beltway apologists.

* In all honesty, I was not unhappy to see Michael Huffington defeated in his California Senate race against Dianne Feinstein and Mitt Romney defeated in his bid to unseat Ted Kennedy. Huffington, a spoiled silver spooner, hired Ed Rollins, the fellow who boasted about bribing New Jersey's black ministry in Christie Whitman's '93 race, and Rollins' pal, Floyd Brown, who produced the infamous, racist Willie Horton commercial in '88. They poured his millions down the media rat hole, taking their usual
percentages. Huffington of course got a negligible share of the black vote in his narrow loss. In Massachusetts, Romney, another GOP silver spooner, proved only that he is as dumb as a political post. In his final debate with Teddy, be boasted that he would have voted for the pork/crime bill and that, if elected, he would oppose a cut in the capital gains tax! If we have to have a passionate liberal in the Senate, we might as well have the genuine article, Teddy himself.

* I was happiest to see the defeat of Rep. Jack Brooks of Texas, a foul-mouthed phoney liberal who loved to throw his weight around, for fun and profit. I will of course not miss the pieties of Tennessee's Jim Sasser. My only
pleasure in seeing Mario Cuomo knocked off, though, was in the heartburn it gave Rudy Giuliani.